ENEL PRODUZIONE-ENDESA ITALIA
PRESS RELEASE
PRESS RELEASE
Competition Authority: Authorisation granted in derogation for an agreement on the supply of electric power
On 10 June 2004, the Competition Authority resolved to close the investigation to ascertain compliance with competition legislation by Enel Produzione S.p.A., Enel Green Power S.p.A., Endesa Italia S.r.l., Edipower S.p.A. and Tirreno Power S.p.A., in the process of reorganising the electricity industry and opening it up to competition. Specifically, the investigation had examined the conduct of these companies in relation to their participation in two entities, Team Energy Management (TEM), and Sistema Transitorio di Offerte Vendite di Energia (STOVE).
With regard to conduct connected with membership of TEM, the Authority resolved that the agreement consisted in sharing the supplying of electric power among the members in order to meet the energy requirements of the captive market. This had been possible thanks to the fact that independent operators had submitted information to TEM on variables relating to their respective industrial organisations (updates on generation facility maintenance plans, notice of the productive sections of generation facilities to meet the demand of 'qualifying' customers), and the use of standard generation costs to define the dispatching of electric power through the national transmission grid. The purpose and the effect of this agreement had been to substantially interfere with competition, infringing the prohibition under section 2 (2) of the Competition Act.
Considering that the TEM system had ceased to exist in June 2003, and that the agreement relating to it had therefore had a short life, and that the conduct at issue therefore had to be viewed in a situation in which some of the provisions of the legislation liberalising the electric power industry that TEM intended to contribute towards (Single Procurer, and the Energy Exchange) were not in force at the time, the Authority decided not to impose any fines.
With regard to STOVE, which had replaced TEM - following resolution 67/03 of the Electric Power and Gas Authority - and to which all the producers in possession of production units qualifying for the reintegration of the so-called 'stranded' generation costs were obliged to belong - the Authority considered that an anti-competitive agreement had been created, because it was intended to spread the demand for electricity from captive customers among competing companies, these companies within STOVE had decided to use benchmark values for the generation costs to organise energy dispatching to the captive market, and a tolerance threshold of +/-5% had been set.
Upholding a specific request from the parties in this regard, the Authority nevertheless resolved to authorise the agreement in question, in derogation of section 4 of the Competition Act. This authorisation was granted for six months, beginning 1 April 2004 as the start-up date of the economic dispatching system connected with the energy exchange, and ending on 1 October 2004. This six-month period corresponds to the residual duration of the whole STOVE procedure provided by the Energy Dispatching Rules in the new centralised electric power market, in order to be able to safeguard the overall electric power system to enable it to deal with emergencies (in other words, during the six-month period beginning with the start-up date of the electric power exchange, STOVE is deemed to be the backup system in the event of any malfunctioning on the centralised electricity market).
Rome, 28 June 2004